Self-employed social workers at risk of financial penalties

When HMRC is determining someone’s employment status for tax purposes, a self-employed individual is defined as someone who is not under the supervision, direction or control of the end client or recruitment agency. This is clearly not the case in the social work arena. In fact, numerous professional standards – such as The Standards for Employers of Social Workers in England, published by the Local Government Association earlier this year - clearly outline the importance of supervision. Consequently, it is clear that operating through a PSC is not an appropriate supply model.

In light of HMRCs ongoing crackdown on false self-employment, giant has urged social work contractors to consider alternative options.

Matthew Brown, managing director at giant group, said, “HMRC is continuing its scrutiny of the use of PSCs by contractors and for those operating in the social work space in particular, this model is not appropriate. Roles within the social work arena require an individual to operate within a strong supervisory culture, meaning they will not be deemed as self employed by HMRC for tax purposes. In our view, contractors should consider alternative options, such as PAYE or the umbrella model, or they could be exposing themselves to investigation by HMRC. For those keen to have access to full employment rights while also benefitting from the ability to move across assignments, the umbrella route will understandably be appealing.”